On the Subject of Marijuana Taxes, Walz and DFL Legislators Hold Divergent Views on How Much Is Sufficient!

If you ask Democratic legislators in Minnesota, they will tell you that recreational marijuana will be legalized in the state sooner rather than later.

Furthermore, it is evident that they have not yet ironed out all the kinks. Consider the rate at which marijuana is taxed as an illustration. Democratic-Farmer-Labor legislators and advocates are in support of a lower tax rate of 8%, however, Governor Tim Walz has proposed a 15% tax. Both are in addition to the 6.875% sales tax already required by the state.

Marijuana supporters argue that a higher tax rate sends more people to the underground market. However, Walz has a different point of view.

Walz explained why there is no indication of a black market during an interview on Thursday: “I questioned my fellow governors through conversation. According to them, the key is striking a balance between imposing too much of a financial burden on the public and causing too many people to go underground.”

It’s important to note that the tax rates on marijuana are all over the map in the 19 states that have legalized it. DFL lawmakers and campaigners are in favor of a tax rate of 8%, which is lower than the rate in several states. However, there are states with much higher taxes, such as Washington’s (where the levy is 37% on top of the state sales tax).

To help minority-owned firms compete with larger out-of-state marijuana corporations, Democratic lawmakers have proposed investing $100 million in a new regulatory structure and grants. The issue is whether or not an 8% tax would be sufficient to cover the additional expenditures.

State Representative Zack Stephenson (DFL–Coon Rapids) remarked last month, “The objective of this is not to create income for the state of Minnesota.” “To increase tax income for Minnesota, we should not legalize cannabis. For a variety of reasons, this should be done. It’s not on the list, for sure.”

Walz claimed that his proposed 15% tax rate would be sufficient to cover the expenditures associated with regulations and grants without having to use the state’s general fund.

That’s why I’m not trying to get folks to start using (marijuana),” Walz emphasized. “Make sure the money is put back into the programs if we do this. Use of general monies to make this happen is not appealing to many people, especially those who are against it.”

Six House committees and three Senate committees have passed bills to legalize marijuana. Many more committees must review bills before they may be debated on the House or Senate floor. DFL officials are confident that legislation will be passed, but they have not provided a date for when this will occur.